When assessing employment status, an individual may fall into one of three categories: employee, worker, or self-employed. These classifications affect the rights and protections they have under employment law. It is an Employment Court that can determine such classification only.
The Employment Appeal Tribunal (EAT) recently delivered its judgment in Dr. Mark Ter-Berg v. Mr. Parul Malde & Dr. Colin Hancock ([2025] EAT 23), offering key insights into how employment status is determined under the Employment Rights Act 1996. The EAT is an appellant court in England, which determines an appeal to an ET judgement.
Case Background
Dr. Mark Ter-Berg, a dentist, sold his dental practice to Simply Smile Manor House Ltd in 2013 and continued working under an Associate Agreement. Following the termination of this working relationship, he made claims for unfair dismissal, whistleblowing detriment, and holiday pay, asserting that he was either an employee or a worker (An employee having more employment law rights/protection than a worker). The Employment Tribunal (ET) ruled that he was neither. Dr. Ter-Berg appealed the decision on worker status to the EAT, which examined whether the ET had applied the correct legal tests.
Key Issues Addressed:
1. Control
The ET rejected Dr. Ter-Berg’s worker status partly because it had already found that he was not an employee due to a lack of control over his work. However, the EAT pointed out that worker status has a lower threshold than employee status. A person may still be a worker even if they have some control over how they work. The EAT stressed that each category—employee, worker, or self-employed—should be assessed separately.
2. Personal Service Requirement
To qualify as a worker, an individual must provide their services personally. Dr. Ter-Berg’s contract included a substitution clause allowing him to appoint a locum in limited situations, such as illness. Initially, the ET agreed this did not undermine personal service but later changed its position, stating that his past self-employment and the parties’ intentions suggested otherwise. The EAT disagreed, ruling that these factors alone did not remove the need for personal service.
3. Role of Mutuality of Obligation
When determining worker status, the EAT found the ET gave undue weight to the absence of mutuality of obligation, a central element in employment contracts meaning an employer must offer work, and the individual must accept it. The EAT clarified that while mutuality of obligation is crucial for determining employment status, it is not essential for determining worker status. The EAT held that the ET’s reliance on this factor was incorrect.
4. Economic Dependency and Nature of the Work
An important aspect of the worker status test is whether an individual is economically reliant on a single employer or operates as an independent business. The ET, having dismissed worker status on other grounds, failed to fully assess this factor, according to the EAT. The EAT ruled that this needed further examination, in determining whether Dr. Ter-Berg was truly independent or relied on the dental practice for his income.
EAT Decision
The EAT found that the ET had incorrectly applied the law when assessing worker status. It ruled that Dr. Ter-Berg met the personal service requirement and that the ET had wrongly dismissed his claim. As a result, the EAT overturned the decision on worker status and sent the case back to a fresh tribunal to determine whether he qualified as a worker under the Employment Rights Act 1996.
Significance of the Judgment
This case highlights the importance of assessing worker status independently from employee status. It confirms that the legal threshold for being classed as a worker is lower than that of an employee. It also makes clear that having a substitution clause in a contract does not automatically mean a person is not required to provide personal service. Furthermore, economic dependency and the real nature of the working relationship must be properly examined.
Subject to the employment status, i.e. “employee”, “worker”, of “self-employed”, the individual may have more employment law protection. Employers and legal practitioners should carefully evaluate these factors when determining an individual’s employment classification, if not, an individual may test their employment status in the Employment courts, costing time and money.